By Liana B. Baker
Feb 26 Cablevision Systems Corp lost
fewer video subscribers than expected in the fourth quarter and
said the company expects growth in cash flow in 2014, which sent
shares of the cable operator higher on Wednesday.
The company, which is controlled by New York's Dolan Family,
said it lost 18,000 cable TV subscribers in the fourth quarter,
which was better than the 28,900 video losses that Wall Street
was expecting, according to StreetAccount.
"Cablevision is facing fewer customer losses with strong
Verizon FiOS competition," said ISI analyst Vijay Jayant.
The cable operator has the largest exposure to Verizon's pay
TV service, which has been taking customers away from cable
companies in recent years.
Kristin Dolan, the president of Optimum Services at the
company, said Verizon has been aggressive with its promotional
pricing. Cablevision has been trying to crack down on offering
discounts to customers who are only interested in promotions, a
strategy the company said was working.
"We continue to hold our own with them," Dolan said,
referring to Verizon.
Cablevision's finance chief Gregg Seibert said on a
conference call that in the first quarter the company expects to
report high-single digit to low-double digit percentage growth
in adjusted operating cash flow, its most closely watched
Cablevision did not provide a full year cash flow forecast
but said it expected some cash flow growth in 2014, but not at
the same rate of the first quarter.
BUYER OUT THERE?
Executives on the call declined to comment about the recent
Comcast -Time Warner Cable proposed $45.2
billion merger that is set to shake up the U.S. cable industry.
MoffettResearch analyst Craig Moffett said that deal probably
robs Cablevision, a perennial takeover target, of one potential
To improve its case with regulators, Comcast has said it is
willing to sell 3 million subscribers to keep its market share
below 30 percent. Cablevision, with a base of about 3 million
subscribers, now seems like an unlikely target for Comcast,
"Comcast isn't going to divest subscribers in one
transaction to buy them back in another," Moffett said.
Still, Cablevision's foothold in markets such as Long Island
in New York and New Jersey would still make it attractive to the
cable company that controls New York City.
Revenue rose 4.5 percent to $1.58 billion. Analysts on
average were expecting $1.57 billion, according to Thomson
Net income was $51.8 million, or 19 cents per share, down
from $116.54 million, or 45 cents a share. A year earlier, the
company had higher net income because of discontinued operations
such as Bresnan and Clearview Cinemas, two assets Cablevision
has since sold.
Adjusted for discontinued operations, EPS was 18 cents per
share, which beat Wall Street estimates of 9 cents per share,
according to Thomson Reuters estimates.
Cablevision's lower costs helped improve its cable margins.
Its fourth-quarter cash flow margin was 32.8 percent, which was
up slightly from a year ago.
Cablevision shares rose 67 cents or 4 percent to $17.29.